Akzo Nobel to set up Rs 150-crore plant in Gwalior

MUMBAI: Leading global paints and coatings firm Akzo Nobel plans to invest Rs 150 crore in a new manufacturing plant at Gwalior in Madhya Pradesh.

"We are adding one more integrated greenfield site at Gwalior, for which we plan to invest up to Rs 150 crore this fiscal," managing director Amit Jain was quoted as saying in the company's annual report.

The work to establish integrated coatings facility at Gwalior has started. At present, the company operates five plants.

The Netherlands-based company operates mainly in decorative paints, performance coatings and specialty chemicals here, and recently made a foray into wood finishes.

It enhanced its manufacturing capacity last fiscal by commissioning a 30 million litre facility in Hyderabad. It also added capacity of coil coatings at Bangalore plant.

The report cautioned that coatings market in the country is likely to slow down in FY13.

"Coatings market growth in 2012-13 is expected to slow down, with several challenges posed by factors like increase in rates of excise and service tax and hardening of the dollar against the rupee, putting pressure on costs and business profitability."

The coatings segment had recorded a turnover of Rs 2,030 crore in FY12.

The company added that it would keep a close watch on the global trends and price movements in key raw materials.

"Long-term agreements with strategic vendors have already been put in place, thereby guaranteeing raw material availability. In spite of these efforts, we still continue to face cost and margin pressures," Jain said.

The company follows a risk management policy, under which all material foreign currency exposures are hedged through forward covers, to protect against unexpected swings.